You buffed up your resume, sent out a million applications, and sat through dozens of interviews. Now the job you’ve been working to win is yours — but there’s a small, unexpected bump in the road. Your new employer has handed you an employment contract and they’re asking you to sign. What now?
At a glance, the contract terms seem okay, but you’re not a lawyer. Should you ask the new HR department to give you a few days so you can have an attorney review it? Will they get annoyed and retract the offer if you do? What’s your best next step?
As much as you’ve focused on the application, the benefits, and the salary, your hiring process is not complete until you’ve signed the employment contract, and as tempting as it is to just sign and get started, that could be a very big mistake. The terms of those contracts may be fine, but they are written to protect the employer rather than the employee. You want to make sure that everything that you’re agreeing to is reasonable, and you want to do so before you’ve signed rather than try to renegotiate at some point in the future, when you’re already bound to an agreement. Doing so will not only make sure that your time with your new company is rewarding, but will also protect you from potential actions from the job that you’re leaving and wherever you may want to go next.
The best way to ensure that there are no hidden terms that could present a problem down the road is to contact an experienced employment attorney and ask them to review the contract before you are signing. Asking for the additional time from the new employer may be intimidating, but keep in mind that they are as anxious to hire you as you are to begin work. Also, your request will not be the first of its kind, and there’s a good chance that your request will confirm for them that they have chosen a smart, thoughtful person.
What an Attorney Will Look for in Your Employment Agreement
- Probationary period
Many employment agreements specify requirements and restrictions on the availability of certain benefits until a probationary period has been completed. While this period is generally protective in case you decide you don’t want to stay with the company, your attorney will suggest modifications should the terms be unreasonably long, tied to unreasonable performance expectations, or vague.
- Non-compete agreements and other restrictive covenants
It is entirely understandable that an employer would want to protect themselves against unfair competition and the misuse of their intellectual property. Unfortunately, some have taken the restrictions used in these types of covenants to an extreme that goes beyond being reasonable and borders on being punitive. Terms that are unreasonably long and overly broad in restricting your ability to work in your field of speciality or geographic area may prevent you from working after your employment ends. These terms should be negoatiated at the beginning of the employment at a time that employee has leverage to negotiate terms. At the same time, your employment attorney can also review any agreement that you had with your last employer to ensure that you are not violating any terms.
- Arbitration Agreement and Waivers of Rights
Some employers ask employees to check their rights at the door and to prospectively waive their right to sue or to have a jury. Some agreements seek to waive other rights, such as statutes of limitations. Even though these terms violate public policy, Courts will sometimes still enforce agreements where employees agree to arbitrate disputes. These waivers merit special scrutiny.
- Forum selection clauses
Often an employment agreement will contain a forum selection clause asking the employee to agree that any disputes regarding the agreement will be interpreted under the laws of a foreign state, and requiring that any legal action may only be initiated in a place other than where the employee is employed. In the event of a dispute, this can make it very difficult for the employee to have an even playing field to resolve their dispute
- Bonuses and Clawbacks
Many agreements provide for bonuses. Such provisions should clearly explain the conditions that are required for earning a bonus, and set clear parameters. Sign-on and stay-on bonuses often have clawback provisions requiring an employee to repay the bonuses of payments in the event of early termination of employment. These provisions should be carefully examined.
- Conditions for termination of the contract
Many employment contracts are “at-will”, meaning that either party may terminate the employment relationship at any time or for any reason. However, employment agreements that seek to bind the parties for a period of time should provide fair and measurable terms for either party to terminate the agreement. At the onset of employment is the proper time to negotiate terms of termination, such as notice pay and severance pay in the event of a no cause termination. The definition of “cause” should be carefully well-defined.
- Benefits
Many employers offer vague terms to describe the benefits offered with employment, only to reveal restrictive terms within the employment agreement regarding paid of family leave, vacations, or maternity pay.
- Other potential problems or pitfalls
When an attorney reviews your employment agreement, there may other areas of concern that need to be addressed or negotiated, including flexibility of hours and travel, job performance parameters, the ability to accept other work, how evaluations and performance will be reviewed, what company property will be provided, how expenses will be reimbursed, and a host of other employment issues that should be understood before an agreement is signed.
While it is always exciting to start a new job, it is important that you don’t let your enthusiasm get in the way of self-protection. A one hour consultation can provide invaluable information and help you begin your new employment on the right foot and in control of your legal rights and your career. Contact us today.